What are Business Accelerators, Incubators, and Innovation Labs?

Author: Ekaale Ekuam

Have you ever wondered the real meaning of these three words which have become synonymous with entrepreneurship, startup growth, development and innovation? These words are often misinterpreted as meaning the same thing. 

In reality, they have huge differences but also exhibit one key similarity. They all aim to induce a common objective of enhanced business growth or deliver operational efficiency or value chain benefits within the business enterprise, however   the way in which they achieve these objectives differs considerably. 

So what exactly are accelerators and incubators?

A dictionary explanation of an accelerator is “a person or thing that causes something to happen or develop more quickly”, so from a business perspective therefore an Accelerator is an agent or catalyst of change in business and their main objective is to help business startups achieve some form of change, in terms of business growth in just a few months, that would normally take anywhere between 12 to 18 months.

 In simple terms, it is to grow a business from one level to another level while registering a significant growth over time. Take for example” Africana Take Away” a fast food restaurant operating in Nairobi Central Business District (CBD) how can   accelerators become an  important aspect to this  business of fast food? An accelerator often provides startups with the tools to establish strong value propositions in this case Africana Take Away, in order for this enterprise have the best chance of getting or achieving external funding.

This fast food as a startup must have a product or a prototype ready with clear concepts that can be exploited through partnership agreement by an accelerator who will invest some capital, in return for equity stake in the restaurant once they accept to take part in the business acceleration program.

Accelerators purely operate a short term arrangement in terms of support while focusing in recouping their interest in the business. This approach of business acceleration is a new concept that most Kenyan entrepreneurs either shy away from adopting due to trust issues or lack experience to allow external funders.

On the other hand, Incubators are somewhat different, Incubators main objective is to assist startups with longer term business development programs, providing startup in this case the restaurant, with time and resources to design and build an efficient and sustainable fast food business model. 

How is it different in the approach as compared to the accelerators?

Incubators main objective is to mould business startups from the idea stage into successful self-sustaining business enterprise. Take the example of incubating a chicken egg, every effort will be done to ensure the egg is gets the right temperature, safety against predators as well as taking good care of the brooder.

 Just like an egg, businesses also go through all these stages of development in order for them be self-sustaining enterprises in the long run. The investment is mostly provided by the incubator or the sponsor, most corporate firms have recently embraced this new approach and established their own incubation centers.

There are a number of notable business incubators in Kenya, iHub for example is an open platform for techies, technology companies and investors alike, it brings together entrepreneurs, mobile software developers and tech designers.

Another incubator is Chandaria Business Innovation and Incubation Center (CBIIC) located at Kenyatta university, it offers entrepreneurial training to students for a period of between six to one year. This program is aimed at igniting entrepreneurial culture among students and while  encouraging them to join informal employment sector.

One notable thing  is that this program is facilitated by Manu Chandaria Foundation and Youth Enterprise Development, just to mention a few incubators.

On the same breath, County Governments can adopt this approach of business incubation through Private Public Partnership (PPP) model in order to build capacity for MSME’s that require support to grow by providing a platform, for shared resources and knowledge to nurture and support the development of early stage firms in all sectors through information technology and communication (ICT) to drive the innovation agenda.

Finally, what are the Innovation Labs?

Innovation Labs, also have a single focus of business growth like accelerators and incubators, however this approach is used by organizations as internal think tanks to encourage innovation within the organization.

 Innovation Labs are strategic and goal focused, and are used as tools to address very specific and individual innovation requirements. Innovation Labs can be set up for just a few days, or run over the course of a few months in order to address a certain issue in the organization, for example focus on creating innovative solutions to complex technological challenges faced mobile companies through integration with other payment platforms.

In conclusion these three tech catchy words, all offer startups and entrepreneurs the chance to grow and develop their business, but they have very concrete differences.

The Author, is an expert in Entrepreneurship and Innovation Management.

ekaale.ekuam@gmail.com